| Several agencies of the US government support | | | | They will help settle disputes and negotiate tariff |
| departments that have mandates to help you | | | | issues. Once described as "glorified matchmakers" |
| increase your export sales and minimize risks with | | | | they will go as far as possible to help you export |
| regard to the sales of products and services to | | | | safely to Africa- even to the US Ambassador to |
| Africa. These departments exist within US | | | | facilitate these objectives, if appropriate. |
| agencies such as the Export-Import Bank of the | | | | And they help with the nuts and bolts of |
| United States, the Department of Commerce, | | | | exporting to Africa such as setting up meetings |
| and the Overseas Private Investment | | | | for you with up to 5 prospective buyers per day, |
| Corporation. All are supported by a relatively | | | | selecting drivers, translators and hotels. When you |
| recent law called: The African Growth and | | | | go to Africa to sell your goods or services you |
| Opportunity Act. The African Growth and | | | | will not be making a cold call; you will be meeting |
| Opportunity Act (AGOA) was signed into law by | | | | with pre-qualified people when you participate in |
| President Bush on May 18, 2000 as Title 1 of The | | | | this program- all at a nominal cost to cover the |
| Trade and Development Act of 2000. The Act | | | | agency's expenses. |
| offers tangible incentives for African countries to | | | | It is necessary for you to actually travel to Africa |
| continue their efforts to open their economies and | | | | and meet face to face to successfully export to |
| build free markets. | | | | Africa. This is a cultural necessity. African |
| The African Growth and Opportunity Act (AGOA) | | | | businesses do not operate like American |
| has been modified three times to increase | | | | businesses where we trust negotiations conducted |
| exports to Africa. | | | | over the telephone and internet, and often |
| In the first modification, AGOA was changed in to | | | | transact without ever meeting the buyer or seller. |
| substantially expand preferential access for | | | | What exports are needed in Africa? You can read |
| imports from beneficiary Sub-Sarahan African | | | | the research reports to find out specifically what |
| countries in several ways: 1) The term "fabric" | | | | is in demand. At the top of the list you will see |
| was previously interpreted by U.S. Customs as | | | | products that purify water. Africa has a huge |
| excluding components that are "knit-to-shape" (i.e. | | | | water infrastructure need. There is also a great |
| components that take their shape in the knitting | | | | interest in security related devices such as high |
| process, rather than being cut from a bolt of | | | | tech devices to prevent theft of vehicles and |
| cloth); now knit-to-shape apparel will qualify for | | | | increase recovery of stolen vehicles. Textile |
| AGOA benefits. 2) The definition of hybrid cutting | | | | manufacturing equipment and telecommunications |
| was broadened to include cutting of fabric in the | | | | equipment also head the lists. Certain medical |
| U.S. and/or AGOA countries. 3) The volume cap | | | | devices are also in demand. |
| on duty-free treatment for apparel made from | | | | What are some of the challenges regarding |
| fabric made in AGOA regions or, for lesser | | | | creating or increasing your export sales to Africa? |
| developed beneficiary countries from fabric made | | | | It is difficult to qualify buyers; there are limited |
| anywhere was doubled. 4) Botswana and Nambia | | | | credit reporting facilities in Africa; African |
| were specially designated as less developed | | | | companies' auditing and accounting systems are |
| countries. | | | | not "world class". And it is difficult to ascertain |
| In the second modification, AGOA's periods for | | | | who will actually pay as promised in you |
| preferential treatment for African imports to the | | | | negotiations. To minimize these risks it is prudent |
| US were expanded. | | | | to work with the Export-Import Bank and their |
| In the third modification, known as AGOA "1V" | | | | correspondent banks and insurance brokers for |
| was expanded and liberalized again. In essence, US | | | | international trade transactions to Africa. |
| laws were created to increase US exports to | | | | There are specific Export-Import Bank standards |
| Africa and imports from Africa to the US. | | | | for short-term and medium term credit; these |
| Pursuant to AGOA the US organized a | | | | may be located on their website at exim.gov. |
| U.S.-Sub-Saharan Africa Trade and Economic | | | | Financing guarantees and insurance are available |
| Forum hosted by the Secretaries of State, | | | | for short term financing in 44 Sub-Sarahan |
| Commerce, Treasury, and the U.S. Trade | | | | African countries. They facilitate more competitive |
| Representative. The Forum serves as the vehicle | | | | terms for African buyers. After the US |
| for regular dialogue between the United States | | | | correspondent bank has reviewed and approved |
| and African countries on issues of economics, | | | | you for financing, you can use these guarantees |
| trade, and investment. This fosters a unique | | | | and insurance to minimize your accounts |
| cooperation between US agencies, African | | | | receivable financing risk when extending credit to |
| countries, and US businesses that desire to | | | | African buyers. This applies to transactions |
| increase export sales to Africa with minimal risk. | | | | wherein you have successfully delivered your |
| How does this work? It involves the Export | | | | products or services to African purchasers. |
| Assistance Centers of the US Department of | | | | Unfortunately, there presently is no way to insure |
| Commerce to assist you with your marketing and | | | | against contract frustration, also known as |
| sales efforts to Africa and financial support from | | | | transactional risk. In other words, you take the |
| the Export-Import Bank of the United States to | | | | risk of default if a prospective African buyer |
| Banks that participate in and finance the export | | | | cancels the transaction before it is completed. You |
| of goods and services to Africa in a variety of | | | | are at risk regarding disputes such as delivery or |
| programs. | | | | product specifications until they are resolved. And |
| The Export Assistance Centers are part of the | | | | you cannot avoid devaluation of currency as a |
| U.S. Commercial Services which is the trade | | | | political risk either. |
| promotion of the International Trade | | | | On the other hand, commercial risks such as |
| Administration (a part of the US Department of | | | | insolvency, bankruptcy and protracted default are |
| Commerce). Their mission is to provide 1) market | | | | covered risks utilizing these programs; also |
| research in the form of country specific | | | | covered are political risks such as war, revolution |
| commercial guides; 2) industry sector analysis; and | | | | and insurrection. |
| 3) internal market insight reports. They provide | | | | The bottom line: you can use accounts receivable |
| trade counsel and advocacy through every step | | | | financing to export to Africa to increase your |
| of the export process. They sponsor trade | | | | sales, minimize risks, and increase your working |
| events that promote your product or services to | | | | capital when you work with the appropriate US |
| qualified African buyers. They provide | | | | agencies, their correspondent banks and insurance |
| introductions to qualified buyers and distributors. | | | | brokers. |